Bill DeShivs is correct. The frame is from an Argentine "sistema"; it is the USP marking that is fake and very poorly done at that. The slide is from a Colt Model 1911. If the gun shoots OK, and didn't cost too much ($200 would be OK, $500 would be crying time) shoot it and have fun. As to what to do, I say leave it alone and don't spend money on it. Its collector value is zero, and nothing you can do to it will make that situation any better.
The serial number is just fine; that is the way the Argentines marked them. That Italic font is unique, and should have tipped off everybody.